European Central Bank Reaffirms Role as Last-Resort Lender, but Aid Seen as Hinging on Passage of Bank-Deposit Tax

NICOSIA, Cyprus—The Cyprus government was working with European officials on contingency plans to keep the island's teetering financial system afloat in case of a crippling outflow of deposits when the island's banks reopen after an extended bank holiday.

But analysts weren't expecting the same help to come if Cyprus rejects its portion of a bailout deal, as its parliament effectively did on Tuesday by resoundingly defeating a plan to raise its €5.8 billion share from a levy on bank depositors. Imposing costs on bank...